Forex Today: FOMC Minutes Suggest 1% Hike by August

The FOMC Meeting Minutes released last night indicate that the Fed is likely to hike the interest rate by 0.5% in June then again in July, beyond the “neutral” level, with members expressing hope strong action soon will allow for flexibility later in the year. However, it was also indicated that “restrictive” interest rates “may well become appropriate”.The FOMC release did not trigger any abnormally large market movements, but it helped firm up the US Dollar which has been declining for almost two weeks. Stocks and commodities rose a bit, suggesting the market still has some cautious optimism about a “soft landing” (higher rates without an economic recession) in the USA.In the Forex market, the US Dollar is firmer and rising, showing signs of returning to the direction of its long-term bullish trend. The NZD and AUD are the weakest currencies right now.Major cryptocurrencies, including Bitcoin/USD, are continuing to consolidate. However, Bitcoin’s key support level at $28,607 has continued to hold for yet another day. This suggests that the line of least resistance in Bitcoin is likely to be upwards, so we may see a rise in value here over the coming days.

Natural Gas futures closed yesterday at a new and very long-term high, suggesting an upwards move is likely over the near term. However, Natural Gas has lately showed huge volatility and very deep bearish dips, making trend trading this energy challenging.Today will see a release of preliminary US GDP data, which is expected to show that the US economy shrunk last quarter at an annualized rate of -1.3%. If the data comes in dramatically different, it could cause volatility in the markets.It is a public holiday today in Germany, France, and Switzerland.Daily new coronavirus cases globally rose last week after falling for eight weeks.It is estimated that 65.8% of the world’s population has received at least one dose of a coronavirus vaccination, while approximately 6.7% of the global population is confirmed to have contracted the virus at some time, although the true number is highly likely to be much larger.Total confirmed new coronavirus cases worldwide stand at over 529.7 million with an average case fatality rate of 1.19%.The rate of new coronavirus infections appears to now be significantly increasing only in the Bahamas, Belize, Chile, the USA, Costa Rica, Jamaica, Panama, and Taiwan.